Dutch launch new law to protect temp workers

The Dutch government this week has proposed a new law to regulate the provision of temporary workers by intermediaries, such as employment agencies or payroll companies, including employers of record (EORs) and platforms.

It will apply if a company is based in the Netherlands or elsewhere, as long as they assign workers in the Netherlands to a client to work under the client's supervision and control.

According to international law firm Osborne Clarke, the main purpose of the bill is to improve the position and protection of temporary workers, especially migrant workers, and to ensure a level playing field for all providers and users of temporary workers.

The law firm said the bill aims to address the problems and abuses that have been identified in the temporary work sector, such as underpayment, exploitation, fraud, and unfair competition. It introduces a system of government-controlled admission for providers of temporary workers, which means that they need to obtain a permit from a public authority before they can operate in the Dutch labour market.

The permit will be granted based on a set of criteria, which cover things like identification, integrity, financial security, compliance with labour laws and quality of service. More detailed regulations will be developed in due course relating to the fees and procedures for applying for and renewing the permission, the law firm said.

The bill also imposes obligations on providers of temporary workers, such as informing the temporary workers and the users of their rights and obligations, providing financial security for a minimum amount of €100,000 (£86,367), and co-operating with audits and inspections. And it gives more powers and tools to the Labour Inspectorate and other authorities to monitor and enforce the compliance with the admission system and the normative framework, such as data exchange, administrative fines, and withdrawal of permission.

The bill applies to all providers of temporary workers, regardless of whether they are established in the Netherlands or in another country, as long as they operate in the Dutch labour market: “In other words,” Osborne Clarke said, “companies from the UK and US, and elsewhere that place workers in the Netherlands without having an office there, which is an increasingly common model in this era of remote service provision, will be caught.”

The bill provides for a transitional period for providers of temporary workers who have been active for a long time and meet certain conditions, such as having a valid certificate from a private certification body or being a member of a recognised employers' organisation.

These providers will be granted permission automatically, without having to submit an application or a report on compliance with the normative framework. However, they will still have to meet the other obligations and requirements of the bill, such as providing financial security and cooperating with audits and inspections, the law firm said.

A statement from Osborne Clarke said: “The bill is expected to come into force as soon as possible after its approval by the Dutch parliament, except for the provision that makes the violation of the admission system a punishable offence, which will enter into force one year later.”

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